1 List all sources of income. Create a list of all your monthly sources of income and add them up. This list should only include regular sources of income, not bonuses or one-time jobs that do not necessarily follow a monthly schedule. If you have no regular income and your family’s total income is variable, try to estimate how much money your family made during the previous year and divide that by 12.
2 Monitor all expenses. Keep all your receipts for one month and write down all your expenses. This should include regular bills and essentials like rent, utilities, tuition, insurance, and groceries. Add other purchases made for the household. Add up all the fixed costs, and then add up all the flexible miscellaneous costs. This one-month snapshot will give you an idea of your spending behavior.
READ: Quiz: In 30 years, will you be a spender, a saver, or an investor?
3 Set a spending limit. Compare your expenses against your income, and set an ideal limit to your monthly spending. This spending limit should cover all your fixed expenses and leave enough money for specific savings goals and long-term savings. Once you've set this monthly budget, begin to track all income and all expenses every month to make sure you are staying on track.
4 Identify savings goals. In case you don’t have enough money to put towards savings, your first goal should be to cut out any flexible spending that you possibly can. Once you’ve done that, you can also try to find a way to increase your income. Now that you have some breathing room, your first goal should be to build an emergency fund to cover drastic and unexpected expenses.
READ: 3 side hustle ideas to finance your life insurance
BPI AIA offers different products under BPI AIA Direct, which protects you and your family in case of an accident or unexpected illness. These also offer life insurance benefits, so you can be assured that your loved ones will be financially able to meet their needs even when you are no longer there to care for them. Don't worry: BPI AIA Direct products are affordable, and you can avail of them easily, even amid the COVID-19 crisis. Learn more and schedule a virtual appointment with a Bancassurance Sales Executive today.